New Transnational Provision of Services Act (ZČmlS-1)

On 22 March 2023, the National Assembly adopted the new Transnational Provision of Services Act, which entered into force on 18 April 2023 (hereinafter: “the Act”).

The new Act transposes Directive (EU) 2020/1057 into the Slovenian legal order and newly implements three Regulations: Regulation (EC) No 1072/2009, Regulation (EC) No 1073/2009 and Commission Regulation (EU) 2016/403 supplementing Regulation (EC) No 1071/2009.

The Act applies to legal and natural persons (registered for business) established in Slovenia and providing services in another EU country, and vice versa. These persons may provide services in another country on a temporary or regular basis, but must obtain an A1 certificate for their worker before providing services.

The Act does not apply to the cross-border provision of services by seafarers in merchant navy companies, air crew and cabin crew, civil servants and contract workers, and Chapter III of the Act does not apply to foreign self-employed persons or foreign employers providing bilateral and transit transport services on the territory of the Republic of Slovenia.

Under Article 4 of the Act, an employer can provide cross-border services if it meets the following conditions:

– it carries out an activity in the Republic of Slovenia,

– does not violate the most important provisions of labour law relating to the rights of the worker,

– the service is provided in the context of an activity for which the employer is registered in Slovenia, except in the case of the secondment of a worker to a related economic undertaking; and

– the service is provided on the employer’s own account and under the employer’s own direction on the basis of a contract concluded with the client of the service, a deed of secondment to a related economic undertaking or in the context of the activity of providing workers to the user.

The same conditions apply mutatis mutandis to self-employed persons.

Under the Act, employers or self-employed persons are obliged to submit an application for an A1 certificate before the commencement of the service or at the latest on the day of the service provision. A new provision is that both are now obliged to inform the Health Insurance Institution of the Republic of Slovenia (ZZZS) of any changes on an ongoing basis, within 5 days of such changes occurring.

The Act now allows applicants to notify the ZZZS within 6 months of obtaining the A1 certificate that the start of the posting was later than the start of the validity of the A1 certificate issued, or that the posting was terminated prematurely or did not take place at all, on the basis of which the ZZZS will then amend the validity of the A1 certificate accordingly.

The application for the issue of an A1 certificate shall be submitted through the national SPOT portal, through which other notifications provided for by the Act are also submitted.

According to the new provisions, the exhaustion of a worker’s right to rest, leave or a short period of absence due to sickness shall not be considered as an interruption of the cross-border provision of services or an interruption of the posting of the worker.

Third-country nationals (posted workers or self-employed persons) may now provide services in the EU on the basis of a valid uniform residence and work permit or a temporary residence permit not issued for employment, self-employment or work, provided that the foreigner has the relevant consent of the Employment Service of the Republic of Slovenia or, on the basis of the Employment, Self-employment and Work of Foreigners Act, they have the right to free access to the labour market.

The Act does not introduce any new conditions for the issue of an A1 certificate for the purpose of cross-border provision of services in one EU Member State, but in line with European legislation, the Act introduces new conditions for the issue of an A1 certificate for the purpose of cross-border provision of services in at least two EU Member States. These apply to employers as well as to self-employed persons. In addition to the national conditions, the applicant for an A1 certificate must also submit a declaration under criminal and material liability that the person for whom the A1 certificate is issued is expected to habitually carry out the work or the employment activity itself in at least two EU Member States.

The applicant (or the person for whom the A1 certificate is obtained) may carry out work or self-employment on the basis of the A1 certificate for a maximum of the following 12 calendar months, and the Act also provides for the possibility of extending this to 18 months.

The Labour Inspectorate will supervise employers and the Financial Administration will supervise self-employed persons.

The Act also regulates the cross-border provision of services by foreign employers and foreign self-employed persons in the Republic of Slovenia. In this part, the legislator has also provided for some changes in the obligations of the foreign employer and the posted worker or driver in the cross-border provision of services, namely that the foreign employer must register with the Employment Service of the Republic of Slovenia before the provision of the service begins. In addition to the information already required, information on the address or GPS-coordinates of the location where the service will be provided is now also required in case the address is not available.

The Act also introduces important changes in the level of fines, which are now significantly lower.

The Act entered into force on 18 April 2023 and the provisions of Article 1(6), Chapter II, Chapter V, Article 26(2), (4), (7), (10) and Article 34 enter into force on 1 January 2024.

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